More often then not many of the more popular markets and futures contracts will be stuck in a range. At times this range could be a few points to hundreds and hundreds of points. In today's blog we are going to be talking about ranges, around or under 50 points on the ES and how we can trade them.
At times we will see a trend within a range and this is our ideal scenario. Wait for the proper market structure to form, either a HH(higher high) and HL(higher low) in a bullish trend. In a bearish trend we look to see a LL(lower low) and a LH(lower high) form. We then pair this with one of the signals from the price action course and we are good to go. Now that is our ideal situation but we need to talk about how we can get there first.
Those of you who watch the morning analysis live streams will know we are always talking about buying deals and discounts. This is especially true when it comes to day trading a range. The reason's being is a follows: first off we do not want to enter into a trade in the middle of the range. Entering into the middle of a range is usually a good way to one have a losing trade and two end up getting whipsawed around.
We don't like either of those so that brings us to our second point: buying\selling deals and discounts. This normally happens at the range extremes, in a bearish range we would look to Lower Highs for our range extreme to get short. In a bullish trend we would look for Higher Lows around the range extremes to get long.
Goes back to the old saying of buy low sell high. Now this may sound simple but after coaching tons and tons of members it is not.
What we like to tell our member is the following" Are you getting a deal or a discount on this trade?" Meaning are you getting either long or short at an advantageous spot.
In a bearish market/range/trend, we tend to look to short a more expensive price. The opposite is true for a bullish market/range/trend, we tend to look for a long at a cheaper price.
Ranges are a part of day trading and there are only a few ways to trade them. Be smart and buy/sell at the extremes or don't trade them at all. Buying or selling the middle or a range will do nothing but set you up for failure 9 out of 10 times.
Look for Deals and Discounts!